In 1978, after nearly 30 years of socialist planning under Mao Zedong, China was one of the world’s poorest countries, saddled with an inefficient, inward-looking economy. Today, China is an upper-middle income country and the world’s largest trading nation, contributing more to global economic growth than any other nation. How could such a remarkable transformation take place?
This course will examine in detail the reforms that have contributed to China’s economic development and the current challenges facing the Chinese economy. After completing this course, you will be able to:
- describe the origin and consequences of China’s key economic reforms since 1978;
- explain how features of China’s fiscal and financial systems have impacted development outcomes;
- assess the extent to which China has integrated itself into the global economy and the consequences of such integration for China and other countries;
- explain the importance of different sources of economic growth during different periods since 1978; and
- critically assess the economic and policy challenges facing China going forward.
This course does not offer certificate at the moment.
Course Overview video: https://youtu.be/YBkhpvWUoIw

Преподаватели

Albert Park

Director of the Institute for Emerging Market Studies, Chair Professor of Social Science and Professor of Economics

Текст видео

In this module, we have studied the reform of China's fiscal and financial systems. We've talked about the fiscal system being decentralized at the beginning of reform in order to address a number of challenges. And the desire to incentivize local leaders. But later we found that additional reforms were required to deal with some of the problems of decentralization. And we discussed the current challenges facing the fiscal system. Then we talked about the financial system in China and first talked about the key incentive problem that faces data on banks, the soft budget constraint. We talked about how China has try to improve the performance of the banking system through various reforms and the current challenges that remain. Finally, we discussed the rise of shadow banking in China and how it links some of the challenges facing both the financial system and the fiscal system. In concluding this module, I want to highlight the fact that, in both these two major systems, of micro economic management. The fiscal system and the financial system, we see that, despite many reforms to date. There's still a lot of additional requirement that needs to be completed. So in these cases, the gradual reform process has been quite gradual indeed. The fiscal system requires a much more transparent system to share resources among and to find responsibilities across different levels of government. The financial system requires further reforms, especially in terms of ownership and entry to improve the efficiency of financial intermediation. In these areas, the opportunity cost of this slow speed of reform has been quite substantial, and thus deserves the top priority for China's economic leaders going forward.